Could Virginia consider a dental-practice sales-tax appeal faxed November 25 when the 90-day filing period expired November 20?

Subject

In accordance with Title 23 VAC 10-20-165 C, the statute of limitations to file an appeal expired.

Plain-English summary

A dental practice challenged tax assessed on implants purchased for patients during a July 2011-June 2014 audit.

Virginia law allowed 90 consecutive calendar days to apply to the Tax Commissioner. The regulation addressed weekends, holidays, mailed appeals, and filing dates. For these August 21, 2015 assessments, the ruling identified November 20 as the final filing date.

The practice sent its appeal by fax on November 25. Because the Department did not receive it by the deadline, the appeal was untimely and the Tax Commissioner did not decide the implants' taxability.

A lien collection had already paid one bill. The practice was directed to pay the remaining interest balance within 30 days.

Common questions

Did Virginia decide whether the dental implants were exempt? No. The late filing prevented a decision on the merits.

Does faxing count when sent after the deadline? No. This fax was received five days after the identified deadline.

Citations and references

• Va. Code § 58.1-1821.
• 23 VAC 10-20-165 C.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 15-243

Original ruling text

December 23, 2015

Re: § 58.1-1821 Application: Retail Sales and Use Tax

Dear *:

This is in response to your letter submitted on behalf of * (the "Taxpayer") in which you seek correction of the retail sales and use tax assessments issued for the period July 2011 through June 2014.

FACTS

As a result of the Department's audit, the Taxpayer submits an appeal contesting the tax assessed on implants purchased for patients in its dental practice.

DETERMINATION

Virginia Code § 58.1-1821 provides, in pertinent part, that "Any person assessed with any tax administered by the Department of Taxation may, within ninety days from the date of such assessment , apply for relief to the Tax Commissioner." [Emphasis added.] Title 23 of the Virginia Administrative Code (VAC) 10-20-165 C provides further clarification regarding the 90-day statute of limitations and states in pertinent part that:

1. The 90-day limitations period begins on the calendar day after the date of assessment and continues for 90 consecutive calendar days (including weekends and holidays).

2. Regardless of the delivery method used, if the 90th calendar day after the date of assessment is a Saturday, Sunday, federal holiday or Virginia state holiday, the administrative appeal will be considered timely if filed on the Commonwealth's next business day.

3. An administrative appeal that is delivered to the department using the United States mail must be postmarked or have a metered date that is on or before the 90th calendar day after the date of assessment to be considered timely filed.

In this instance, the assessments being contested by the Taxpayer were issued to the Taxpayer on August 21, 2015. The 90th calendar day from the date the assessments were issued occurred on Thursday, November 19, 2015. In accordance with Title 23 VAC 10-20-165 C, the statute of limitations to file an appeal expired on the Commonwealth's next business day, Friday, November 20, 2015. The Taxpayer's correspondence to the Department via facsimile was sent on Wednesday, November 25, 2015. In accordance with Title 23 VAC 10-20-165 C, the Taxpayer's correspondence to the Department must have been received by the Department before Friday, November 20, 2015 in order to be timely filed. The Taxpayer's correspondence was not received on this date and, therefore, is not a timely filed appeal with the Department. Accordingly, the Taxpayer is barred from filing an application for correction of the assessments.

It is my understanding that the Taxpayer was issued a memorandum of lien and money in the amount of * was seized and applied to the assessments. As such, Bill is paid in full. The Taxpayer should return its payment for the remaining balance of interest on Bill totaling : Virginia Department of Taxation, Appeals and Rulings, 600 E. Main Street, 15th Floor, Richmond, Virginia 23219, Attn: ** within 30 days from the date of this letter. No further interest will accrue provided the outstanding assessment is paid within 30 days from the dates of this determination.

The Code of Virginia section and regulation cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's web site. If you have any questions about this response, you may contact * the Department's Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns
Tax Commissioner

AR/1-6207754111.T